Council tax – Enforcement – Tender – Applicant local authority carrying out procurement exercise and issuing invitation to tender for collection and enforce of council tax etc – Respondent challenging rejection of its tender under CPR part 7 and Public Contract Regulations 2015 – Applicant applying to strike out claim – Whether procedure being services concession contract not affected by Regulations – Application granted
The applicant local authority was required to take steps to collect and enforce council tax, national non-domestic business rates and business improvement district levy debts that arose within the area of the borough. It achieved that by contracting out their collection and enforcement obligations to bailiffs and enforcement agencies. The original arrangements pursuant to which those services were provided to the defendants expired on 2 February 2016. The respondent was the incumbent provider.
In order to put in place new contractual arrangements, the applicants commenced a procurement exercise and issued an invitation to tender. The respondent was one of a number of contractors who responded and tendered for the work. The tenders were evaluated and the successful tenderers notified. The respondent was unhappy about the rejection of its tender. Following exchanges of correspondence, the respondent issued proceedings under CPR, part 7, pursuant to the Public Contract Regulations 2015 (SI 2015/102).
As a consequence of the respondent’s challenge, the applicants felt unable to enter into contracts with the successful tenderers and applied to strike out the claim. The issues between the parties were: (i) whether the 2015 Regulations applied to the procurement exercise; (ii) if not, what were the consequences for the respondent’s pleaded claim; and (iii) whether the respondent’s claim was more than fanciful or better than arguable.
Held: The application was granted.
(1) Regulation 117 of the 2015 Regulations provided that nothing in the Regulations affected services concession contracts or procedures for the award of such contracts. A “services concession contract” was defined by regulation 2(1) of the Public Contracts Regulations 2006 (SI 2006/5) as “a public services contract under which a consideration given by the contracting authority consists of or includes the right to exploit the service or services to be provided under the contract”.
In JBW Group Ltd v Ministry of Justice [2012] EWCA Civ 8, the Court of Appeal held that the provision of bailiff services to magistrates courts by a third party contractor was a services concession contract and therefore outside the 2015 Regulations. One of the principal reasons for that conclusion was that the contractor performing the enforcement agency services retained part of the sums recovered, which went towards its costs and profit and the contractor had the right to exploit the services being provided.
In the light of regulation 117 and in the absence of any basis on which to distinguish the decision in JBW, the court was obliged to conclude that the proposed contract for enforcement agency services in the present case was a services concession contract and therefore outside the 2015 Regulations.
(2) As a matter of law, the court could not exceed to the respondent’s request for permission to amend its claim to bring an application for judicial review. As a general rule, it would be contrary to public policy, and as such an abuse of the process of the court, to permit a person seeking to establish that a decision of a public authority infringed rights to which he was entitled to protection under public law to proceed by way of an ordinary action and by this means to evade the provisions of Order 53 for the protection of such authorities. A claim started under part 7 could not be turned into a judicial review claim part way through the proceedings. There might be exceptions to that general rule but there was nothing to say that this was an exceptional case: R (on the application of Townsend) v Secretary of State for Work and Pensions [2011] EWHC 3434 (Admin) followed; Alex O’Reilly v Mackman [1983] 2 AC 237 considered.
(3) The course of action suggested by the respondent was inappropriate. As the decision to award the contracts fell outside the 2015 Regulations, it was not a decision which was amenable to public law. Any proposed amendments to the present claim, which could have made the allegations of irrationality and the like necessary for judicial review proceedings, could not ultimately succeed. A public body was free to negotiate contracts and something additional was necessary over and above the fact that the negotiator was a public body to impose on that body a public law obligation. The tender evaluation process was an essentially commercial process, notwithstanding the nature of the services which were to be the subject of the contract. The manner in which the defendant chose to inform itself as to the merits of the tenders was designed to be as objective as possible. Since the 2015 Regulations did not apply, there was no question of any automatic suspension preventing the defendants from entering into contracts with successful tenderers: R v Lord Chancellor’s Department, ex parte Hibbit and Sanders (11 March 1993, unreported) and R (on the application of Menai Collect Ltd and others) v Swift Credit Services Ltd [2006] EWHC 724 (Admin) considered.
(4) Even if the complaint now made by the respondent was somehow capable of giving rise to a judicial review claim in theory, the particular matters raised in the pleading seemed to be incapable of sensible argument, whether on a legitimate expectation basis, or on ordinary judicial review grounds. Thus there was no point in allowing the basis of this claim to be amended because it would still fail.
Joseph Barrett (instructed by Waltham Forest London Borough Council Legal Services) appeared for the applicants; Phillip Patterson (instructed by Feltons Law) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Newlyn plc v Waltham Forest London Borough Council
